- Dell has secured a contract with the Pentagon worth $9.7 billion
- The technological services company will act as a single point of contracting
- Pentagon, intelligence community and Coast Guard to jointly acquire software
The Pentagon seeks to reduce costs and stop the proliferation of software licenses in its latest contracts with Dell and Microsoft.
Dell has been awarded a $9.69 billion contract to serve as a single point of procurement for Microsoft licenses across the U.S. Department of Defense, the intelligence community and the Coast Guard. The contract will steer the Pentagon and other military departments away from duplicate spending on Microsoft licenses.
Defense Department Chief Information Officer Kirsten Davies said the contract would allow the Pentagon to save $422 million a year by consolidating “the existing IT budgets of all services and agencies into a single efficient vehicle.”
Annual savings of $422 million
The contract awarded to Dell, known as the Microsoft War Department Enterprise Software Agreement II, Core Enterprise Technology Agreement, allows Dell to provide Microsoft 365, advanced cloud subscriptions and on-premises licenses. The contract continues the Pentagon’s existing enterprise technology agreement with Dell and Microsoft.
However, the $9.7 billion is not new funds, but rather a consolidation of contract budgets that were renewed at the same time.
“This second-generation blanket purchase agreement will streamline and consolidate critical Microsoft software and services across the War Department, the intelligence community, and the U.S. Coast Guard,” Davies said.
Acting Navy Chief Information Officer Barry Tanner said, “All vendors were evaluated based on competency, comparison to GSA scheduled pricing and the overall value chain for the department. Going through the evaluation process, they emerged victorious.”
Michael Dell, founder and CEO of Dell Technologies, has recently courted the favor of President Donald Trump by pledging $6.25 billion to fund investment accounts for children, called “Trump accounts” in the president’s honor.
The Defense Department has been under increasing scrutiny from across political divides as it seeks approval of a $1.5 trillion budget by 2027. The Pentagon has not approved all of the audits it has conducted since they were legally required in 2018, and the Pentagon aims to pass its first audit by 2028.
Through CNBC
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